44th Parl. 1st Sess.
June 7, 2022 10:00AM
- Jun/7/22 1:50:43 p.m.
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Madam Speaker, I thank the member for his intervention today, although I am not exactly sure where he was getting his information from. The government has certainly pointed towards the war in Ukraine as something to explain the global increase in the price of oil, and of gas more specifically.
However, as it relates to inflation, I think it is fair to say, and I would certainly say, that there have been a whole host of things over the last two years that have played into that. I am willing to accept that, and I am willing to state that. Would the member also be willing to state the fact that inflation is not a problem that is unique to Canada? As a matter of fact, in looking at all the developed countries, we see that Canada is among those at the bottom end in terms of the rate of inflation that we have seen over the last year or so.
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- Jun/7/22 1:51:42 p.m.
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Madam Speaker, I welcome the question from the member across the aisle. I will make two quick points. One is that inflation is measured differently in all of these different countries, so it is very hard to compare them. Yes, inflation is a challenge in all of these other countries, but—
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- Jun/7/22 1:52:25 p.m.
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Madam Speaker, yes, inflation is a global problem, but guess what? All of the countries where inflation is a problem are countries that did the exact same economic, monetary and fiscal policy expansion that we have seen, and that is why there is an inflation problem.
Some hon. members: Oh, oh!
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- Jun/7/22 1:54:29 p.m.
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Madam Speaker, perhaps this will expose a slight difference in approach between the Conservatives and the NDP on this issue. We believe that cutting taxes at the pump by the government will reduce prices for consumers, as evidenced by some actions by provincial governments, including the Government of Alberta and the soon-to-be Government of Ontario.
I do not believe that increasing taxes on companies and giving the federal government more money is going to solve our inflation crisis. I would just point out that when companies pay dividends, most of those dividends go to Canadians, pensioners and elderly individuals who are living on a fixed income, so companies that are making money and paying dividends happen to be a very good thing for Canadians.
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- Jun/7/22 1:55:35 p.m.
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Madam Speaker, I will be sharing my time with the member for Scarborough—Guildwood.
We are speaking today on the opposition motion, and the first point of the motion is that “high inflation rates are driving the cost of living up for all Canadians”. Well, of course, that is what inflation is. However, I would argue that it is driving up the cost for everyone living across the world, and I want to put this into context. Let us look at the Czech Republic. What is its rate of inflation? It is 14.2%. Let us see what Poland's rate of inflation is—
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- Jun/7/22 1:56:32 p.m.
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Madam Speaker, I am glad to reiterate what the rates of inflation are for different countries across the world.
The Czech Republic is dealing with a rate of inflation of 14.2%. Poland is dealing with a rate of inflation of 13.9%. Romania is dealing with a rate of inflation of 13.8%. Greece is dealing with a rate of inflation of 10.2%. The Netherlands is dealing with a rate of inflation of 9.6%. Hungary is dealing with a rate of inflation of 9.5%. The United Kingdom is dealing with a rate of inflation of 9%.
Belgium has an inflation rate of 9% as well. Germany has an inflation rate of 8.7%. The United States has an inflation rate of 8.3%. Portugal has an inflation rate of 8%.
Austria is dealing with a rate of inflation of 7.9%. Italy is dealing with a rate of inflation of 6.9%. Finally, Canada is dealing with a rate of inflation of 6.8%.
This is a world problem. Obviously, we are all suffering the consequences of the illegal war of Vladimir Putin in Ukraine, but that particular motion does not offer many solutions.
Let us talk about the fertilizer prices: “eliminating tariffs on fertilizer”. The hon. members offer that as a simple solution that will cause a great relief for all farmers. Do they not realize that fertilizer went up by 70% to 100% before the Ukraine war? Yes, now there is a 35% tariff on fertilizer, but do they not realize that there are Canadian companies that realigned their supply chains to ensure that they are not going to be penalized by that 35% tariff? Yes, they are paying higher prices, but I believe we should be advocating for a solution that offers all farmers a reduction on prices, not just those who have paid that 35%.
Obviously, for next year, the point of a tariff is for Canadian companies to stop dealing with the Russian government and Russian companies. We heard loud and clear from a Ukrainian MP yesterday that Canada should be doing everything to stop doing business with Russia. I believe that question was asked by the member for Beauce, who heard it loud and clear from that Ukrainian MP, and I thank her for her testimony at the agriculture committee.
The motion talks about the solution to address housing affordability being, let me get this straight, to launch a public inquiry. I just do not understand how that is going to provide immediate relief to Canadians. I am surprised that this actually came from the Conservatives, because the Conservatives are usually about smaller government. Now they are proposing a bureaucracy to look into how we could make sure that housing affordability is available through a public inquiry. Come on—
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- Jun/7/22 2:26:56 p.m.
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Mr. Speaker, the Conservatives love to quote from the Parliamentary Budget Officer's reports so now I would like to quote the Parliamentary Budget Officer, who talked about inflation today. Here is what he said: “The ultimate impetus for the resurgence of high inflation can [be] traced back to the COVID‑19 pandemic. More recently, the Russian invasion of Ukraine has compounded inflationary pressures.”
That is exactly what is happening.
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- Jun/7/22 2:27:38 p.m.
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Mr. Speaker, working Canadians and everyone else do not care what is causing inflation or why everything costs more.
What they do care about is being able to afford to buy groceries at the end of the month, making sure that their kids are not going to bed hungry, and being able to afford to fill up their vehicle so that they can get to work.
Whether it is the pandemic, COVID‑19, or anything else that the Liberals are going to blame, the reality is that they are doing absolutely nothing right now to help Canadians who need it.
Why are they so out of touch with Canadians?
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- Jun/7/22 2:38:22 p.m.
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Mr. Speaker, Canadians have been clear about what they want, and that is effective policies to fight inflation.
As gas prices continue to rise, the tax rises too, so the government is pocketing more and more money. The government is putting more money in its own pockets and less in the pockets of Canadians.
This is a direct measure that Canadians want. Other countries have adopted this measure, so why does the Liberal government refuse to do so?
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- Jun/7/22 4:00:13 p.m.
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Mr. Speaker, today we are debating an opposition motion that is supposed to offer solutions to address the impact of inflation. I want to point out to my hon. colleagues that what they are asking for is that the House call on the government to provide immediate assistance. They therefore believe that providing immediate assistance to address the housing problem is to immediately launch a national public inquiry into money laundering. How is that going to provide immediate assistance to Canadians looking for housing?
I do not understand how a national public inquiry into money laundering is going to provide immediate assistance to Canadians. It does not make sense. I cannot believe that anyone even took the time to write this motion. I see no reason whatsoever to support this motion. I will not be able to support it because it makes no sense.
Today we are talking about inflation, and I know that two Conservative members have switched sides.
Two Conservative MPs, on the day the Conservatives presented a motion to come to solutions to fight inflation, decided to jump camp to a specific member of Parliament running for the highest office. His solution to fight inflation is to fire the Governor of the Bank of Canada. I do not see how that is going to help, but that was the big policy idea that this particular member of Parliament came up with. He also suggested that we opt out of inflation by joining the big cryptocurrency movement.
I am not sure if my hon. colleagues on the other side of the House actually watch cryptocurrencies. Let us take Terra Luna, for instance. In April, it was worth $135.
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- Jun/7/22 4:03:11 p.m.
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Mr. Speaker, just to make sure my colleagues heard me properly, I note that on the day the Conservatives are proposing a motion to fight inflation, with solutions that have no immediate impact on Canadians, two members of Parliament have decided to jump ship to support the member for Carleton, who came up with two policy ideas. Those two grandiose ideas are to fire the Governor of the Bank of Canada and opt out of inflation by investing in cryptocurrency.
With respect to cryptocurrency, I am sure the Conservatives have been following the trajectory of Terra Luna. Terra Luna, about a month and a half ago, was worth $135 on the market. Today it is worth barely a penny. It is worth $0.0003. I have not checked out the latest number, but it is not even worth a Canadian penny, and we do not even have pennies.
I do not see how this motion would help Canadians fight inflation. We have put some solutions forward. Obviously, the Canada child benefit is helping families. It is geared toward the cost of inflation, so that is a potential solution.
I represent a big farming community. We have talked about how we can help farmers lower their costs, and fertilizer is certainly in debate. I do not necessarily support simply giving a direct exemption to companies that have decided to continue to do deals with Russia and Belarus, because other companies have changed their supply chains and have made the decision not to continue doing business with them. If I were advocating for a potential solution, it would be to provide aid to farmers directly, as opposed to giving it to companies that continue to do deals with Russian and Belarusian companies.
Many companies signed contracts with farmers last summer, telling them they would pay a certain price. Some of those companies are now telling them that even though they signed a contract, they are going to charge them extra fees. When an individual and a company sign a contract in Canada, they are creating a bond of trust.
It is a binding contract. I am fortunate that in my riding this is not happening, but I have heard many, many stories like this in other parts of the country. Companies are not honouring the contracts, and I would hope that they continue honouring them. It is a binding agreement they have signed with farmers and they owe it to our farmers to honour those contracts.
I do not support this motion because it does not include any solutions that will help Canadians immediately.
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- Jun/7/22 4:08:52 p.m.
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Madam Speaker, if we want to create government programs we need to generate revenues. That is a simple fact. Government does not own any dollars. It needs to generate revenues. One way to generate revenues is to unleash the power of entrepreneurship, which is a great idea, and we have great entrepreneurs. Farmers are playing a huge role in this country.
However, we simply cannot create money. Money does not grow on trees. We need to generate wealth, and to do so, we need to ensure our entrepreneurs and private sector are healthy. I believe the economy has been growing. Obviously, we are concerned about inflation, but the solutions provided by the current opposition is not something that is realistic and will not provide any immediate relief.
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- Jun/7/22 4:09:42 p.m.
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Madam Speaker, the member is right that money does not grow on trees. In Canada, we do not even use paper. We use a polymer that based off oil, so there is a very fitting analogy there that oil does produce prosperity in this country.
The member keeps talking about how somehow giving Canadians a break at the pumps will not actually help. We have a very clear and present example, and economists agree, of how definitively the tax cut offered by the Province of Alberta has led to two things. One, it has led to savings for Canadians at the pumps, and two, it has reduced inflation in the province of Alberta by a significant amount.
When a proposal is brought forward that would actually help, and there is proof of it, why will they not support it?
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- Jun/7/22 4:11:54 p.m.
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Madam Speaker, I find the motion actually pretty easy to vote against. Whoever wrote the motion has been quite brilliant at describing the issue, but not nearly so brilliant at describing the solution.
You might be interested in knowing, Madam Speaker, that I do all the family shopping. I also do the gas purchases and I buy materials for the house. I remember buying two-by-fours during COVID and I had to go to three stores to try to just get one two-by-four and the cost was 100% more than I paid in years previous. I agree with the description of high inflation for everyone, that gas is more expensive and that the cost of food is up. I have experienced that personally.
What the hon. members from the Conservative Party do not seem to realize is that the supply chains were pretty badly messed up during COVID. Some were out because the countries were locked down. Some were not able to produce the products they had previously. Take for instance, microchips. We could not get any microchips for anything, including a car. Again, within my experience we live in a neighbourhood where we bought a couple of cars and for a considerable period of time there were no cars on the car lot. In fact, we could buy a used car for what we paid a year or two previously for a new car. Just a simple thing like microchips has in and of itself driven up the cost of living quite dramatically.
Add to that the great resignation. People simply do not want to do the jobs that they were doing pre-COVID and that in turn has driven up the cost of labour. I took note in the Report on Business Magazine last weekend that the Royal Bank of Canada has just given a 3% increase across the board to all of its staff because it knows it has difficulty recruiting and retaining staff. We have had representations from Irving, which is building our warships. Its biggest challenge is, again, recruiting and retaining staff, even with substantive increases in salary.
Add to that the Putin war, which took supply chains that were really badly messed up by COVID and only made them more difficult. Sanctions do mean something. They mean that certain products that we are used to purchasing simply cannot be purchased any longer from the Russian-based sources. Add to that the fact that Canada is about 2% of the world's economy. We are in effect inflation takers as opposed to inflation makers. Even for products that we have in substantive quantities such as oil and gas, wheat and various other mineral products, we do not actually get to set the prices. The prices get set by places other than Canada. As I say, we are price-takers, not price makers. We are inflation takers. We are not inflation makers.
On a point of information, as much as the Conservative Party would wish to pin the inflation upon the Prime Minister, I would suggest respectfully that it is a bridge too far even for them.
What is the Conservative solution? The Conservative solution is a reduced consumption tax, and if we do that on the GST and the tax on carbon, everything will be resolved. That is possibly the worst idea ever. Any economist in Canada will say, with the notable exception of Stephen Harper, that if we want to generate government revenues we should be taxing consumption and we should be reducing the tax on labour.
Income tax is a tax on labour. Consumption tax is a tax on consumption. In effect, it is taxing the person who works hard and reducing the taxes on the person who plays hard. If we reduce the consumption tax, it is practically a guarantee that large oil and gas companies and other companies as well will backfill with price increases, and I would expect that our Conservative friends would have recognized that before drafting this motion. The consumer gets no relief. The government revenues are drained. Rich companies get richer, and the working person gets increased income tax. Hardly what one would describe as a brilliant solution.
Finally, there is carbon pricing. The most effective way to reduce carbon consumption, short of turning down the thermostat or reducing unnecessary travel, is to apply a tax to it. If, in fact, the tax is collected and applied as it should be, then, in the end, the lower-income families will actually receive rebates in the mail. In Ontario, that means $745, and in Alberta, it means something in the order of just over a thousand bucks.
There are those who say they cannot adjust. For some that is actually true. For others it is simply a lifestyle choice. However, if we are going to be serious about carbon reduction, then we have to apply this sort of tax, which has repeatedly demonstrated to be the most effective way to reduce carbon consumption.
Given that inflation is real, given that we are just 2% of the world's economy, given that we are a trading nation and highly dependent upon external trade, given that the Putin war will not end any time soon and given that inflation is well beyond the Bank of Canada target, what is a relatively small but prosperous economy to do?
We will start with some of our strengths. We have a relatively low debt-to-GDP ratio, possibly the best in the G7. It is the same thing with jobs, as we have had 115% job recovery in the post-COVID era. We have a number of products that the rest of the world wants. There are, frankly, more jobs available here than there are people to fill them. Something about over a million positions are begging for people. Again, we have heard that from various employers who are looking for people to fill positions and simply cannot find them, so we are in a relatively strong position.
Then there are some direct relief measures. The Canada child benefit in my riding is worth over $100 million per year. That is a significant relief to those constituents of mine who have children. The $10-a-day child care plan, which is just being rolled out in Ontario, will help a lot of people and it will make a significant difference in terms of the choices that those who wish to take advantage of the program have. In some instances, particularly during the earlier part of this government, we were able to reduce the tax margin for those with lower incomes and apply relief to those who actually needed it the most.
However, we should recognize that the Bank of Canada is the main player here. It has control over monetary policy. The Bank of Canada's monetary policy is independent from government, as it should be. It is possibly the worst idea in the world to have the government control monetary policy because government interests and central bank interests are not always lined up. As an example of that, I might point to Turkey, where the government of the day has taken over monetary policy. That has led to something in the order of 70% inflation. The central bank has renewed its 2% target. We need to recognize that interest rates are going to rise and possibly even dramatically rise.
Our strong monetary policy is our most effective weapon. We have a relatively decent fiscal position. We do not need to yield to the siren song of reduced consumption taxes.
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- Jun/7/22 4:21:21 p.m.
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Madam Speaker, it is a great honour to ask my hon. colleague a question. He has given so many years to this place in the service of his community.
In the United States, the President as well as the Secretary of the Treasury, Ms. Yellen, have actually taken responsibility for underestimating inflation. Why is it that no one in the government, cabinet or the executive branch, has acknowledged that they underestimated inflation and they were behind the curve? Can they not just say that it is a lot higher than they thought and there are some immediate things that they can do to fix it?
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- Jun/7/22 4:22:09 p.m.
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Madam Speaker, I appreciate that question from the hon. member, because in a speech I made about a year ago, or sometime around then, I flagged that particular issue. In fact, from my own grocery shopping, I recognized that inflation was here. I actually sat down with the PBO at one point and said, “I don't understand why we are not more alarmed about inflation.” People from the Office of the PBO had an explanation that I frankly could not understand, but that said, they were still very helpful in trying to explain it to me.
The Bank of Canada had described inflation at that time as “transitory”. I think it recognized that it was on its way but did not recognize that it was possibly going to be more long-standing than it had previously anticipated, and if there is an issue to be had there, I think that is a legitimate point.
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- Jun/7/22 4:23:18 p.m.
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Madam Speaker, I listened carefully to my colleague across the way. Basically, he is saying what we are also thinking, which is that the opposition motion is a bogus solution for real problems. I understood that he was objecting to one aspect of the motion, which would be to temporarily stop charging the GST on gas and fuel, since it is unclear whether that money would go to consumers.
However, would my colleague agree that the surplus the government is currently reaping from higher gas prices could be used to provide relief to those hit hardest by inflation? These include low-income earners, seniors, agricultural workers, taxi drivers, truck drivers, and so on. Support programs could be put in place for these people.
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- Jun/7/22 4:24:23 p.m.
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Madam Speaker, in saying “a false solution to a real problem”, the hon. member described it better than I did, and I think he is right.
With respect to the revenues, yes, inflation has that effect of giving the revenues a temporary boost, but it is a temporary boost, because once we get the revenues in, the bills start arriving as well, so the costs of running a government are actually going to be much greater because there is necessarily going to be wage inflation, which is essentially what government is.
As to spending the revenues that are coming in, I would not go for that kind of an idea immediately. There have been various relief elements, particularly for seniors, that have been distributed over the last couple of years.
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- Jun/7/22 4:25:18 p.m.
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Madam Speaker, I can tell the hon. member that seniors, single moms and persons with disabilities do not need a lecture from this government on inflation. What they need is food on the table for their families this summer.
My question is this: Will the Liberal government finally start taxing outsized profits so that we can share some of this prosperity with the community?
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- Jun/7/22 4:39:53 p.m.
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Madam Speaker, I would like to thank my colleague for her speech.
I think you often double down on previous motions that were already defeated in the House, such as eliminating consumer taxes, immediately ending health measures and abolishing the carbon tax.
Clearly these proposals do not really help people cope with the global issue of inflation that is affecting a number of essential products and services, nor do they do anything beyond addressing prices of individual products.
Inflation is here and it is real. What real solutions are you proposing to help those hard hit by inflation?
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